Looking At Multifamily in Lowell MA

[Matthew Stanizzi]

I'm looking at some Multifamily homes in Lowell Mass.  I should be able to get traditional financing.  The prices are in a range where I can afford a 20% down payment.   Boston is too expensive.  Anybody have experience in this part of Mass?  Any unexpected expenses with rentals in the area?  

I'm looking at a Quad. With Rough estimates the property should be cash flow positive and so I'm going to take a look.   It's listed for 500K that comes with long term tenants that pay utilities.  Looks to be in good shape with some room for improvements.   Rents in the area are about 1500-1700$ for similar units.   I think it may be over priced as it doesn't pass some of the rules of thumb I've seen on BP but it's about a close as any of the properties in the area get.      

I'm concerned that multifamily on the open Market in this are getting to expensive to be a good first buy.

I may look for wholesale properties or foreclosure as an alternative for value buys.  

Am I on the right track? 

[Dan K.]

Lowell is outside of my area -- I'm much closer to Boston. That being said, a lot of the traditional rules like 2% and 50% don't really apply for me.

My property doesn't come close to the 2% rule, or 1%.

It's important to keep in mind the following -- The expenses on my property aren't really much more than a multifamily that is worth 10% of my property's value. The toilets in a 3 million, 1 million and 200k property all cost about the same to change. Same goes for mowing the grass, painting and replacing a water heater.

The "rules" are a nice guideline and work great in some markets, but real numbers are very important in my opinion. I don't think the "rules" even serve as a a good screener in the Boston metro area.